NAR: Pending home sales up 13.3% over year-ago figures

By Jacob Gaffney

• June 27, 2012 • 9:00am

Home contract signings rose for the 13th straight month, according to the National Association of Realtors, which reported pending home sales rising 13.3% over May 2011 and up nearly 6% over April 2012.

“The housing market is clearly superior this year compared with the past four years,” said Lawrence Yun, NAR chief economist. “Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10% improvement in total sales for 2012.”

The news from NAR joins a larger discussion on the impact of positive housing news for the spring selling season.

On a seasonally adjusted basis, the Standard & Poor’s Case-Shiller 20-city index increased by 0.7% in both March and April. The CoreLogic ($17.39 0.04%) national house price index rose by 1.1% and 1.2% in March and April, respectively. Additionally, Zillow($35.30 2.08%) home value index posted a 0.5% increase in May.

Housing analysts at Goldman Sachs ($91.36 0.33%) said there are some suspicions as to whether all of this good housing news may be misleading. After all, they point there are 2 million vacant housing units, with another 4 million in shadow inventory.

“These two seemingly contradictory aspects of the housing market lead many to ask: Can house prices increase in the presence of excess housing supply?” they ask.

Yun commented that desirable housing inventory is actually low, indicating a push on prices. This low inventory, he said, could actually hold back some contract activity.  “If credit conditions returned to normal and if we had more inventory, especially in the lower price ranges, more people would become successful buyers.  In an environment of historically favorable housing affordability conditions, it’s frustrating to see some consumers thwarted in the process,” Yun said.

 

C.A.R.: Housing Sales Up in May, Inventory Still a Concern

The housing market in California looked mostly sunny in May with strong sales and stabilizing home prices, the California Association of Realtors (C.A.R.) reported Friday.

release from C.A.R. showed that home prices in the state posted gains for the third consecutive month, and home sales finished well above last year’s pace.

“California home sales were strong in May, continuing the gradual recovery of the California housing market,” said C.A.R. president LeFrancis Arnold. “First-time buyers are recognizing that the housing market has hit bottom and are now seeing a sense of urgency to take advantage of ultra-low interest rates and advantageous home prices. Additionally, trade-up buyers are returning to the market after sitting it out for the past few years to get in on favorable home prices.”

Closed escrow sales of existing, single-family detached homes in California rose 3.4 percent to a seasonally adjusted annualized rate of 572,260. This is up from April’s revised rate of 553,670 and is a 21.5 percent increase from 470,910 in May 2011. The sales figure represents an estimate of the total number of homes sold during the year if sales maintained the May pace throughout 2012 and is adjusted for seasonal factors that influence home sales.

May’s sales pace marked the highest year-over-year sales increase since May 2009 and was the highest pace since February 2009, when 598,770 homes were sold at a seasonally adjusted annualized rate.

Home prices also appear to be stabilizing, with the median home price posting month-over-month and year-over-year gains for the third straight month. The statewide median price of an existing, single-family detached home was $312,110 in May, the highest price since September 2010 and an increase of 1 percent from April’s revised $309,050. It was a 6.6 percent year-over-year increase from last May’s $292,850. May marked the second straight month in which the median price posted above the $300,000 level.

C.A.R. attributed the median price increase to a strong sales increase in the higher-priced coastal regions, particularly the San Francisco Bay Area, where the median price was $550,400. Labor and economic growth are both especially strong in that area compared to the rest of the state.

Not all news was good, though. California’s housing inventory sank lower in May, with the Unsold Inventory Index for existing, single-family detached homes dropping to 3.5 months in May, down from 4.2 in April and 5.7 in May 2011. The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate, with a 7-month supply being normal.

“Low housing inventory continues to be the critical issue in the California market,” said Leslie Apple-Young, VP and chief economist for C.A.R. “Inventory levels have not been this low since December 2005, when the supply matched the current level. The Bay Area has the greatest shortage of homes for sale, with inventory levels in the two- to three-month range for Santa Clara, San Mateo, Alameda, and Contra Costa counties.”

The report also showed that homes are moving faster on the market, with the median number of days it takes to sell a single-family home dropping to 46.6 in May, down from 48.9 days in April and 52 days in May 2011.

Mortgage applications soar to highest level since spring 2009

By Kerri Panchuk

• June 13, 2012 • 6:00am

With interest rates well below 4% for the week ending June 8, total mortgage applications soared 18% from the previous week, an industry trade group said Tuesday.

The Mortgage Bankers Association noted that the refinance index increased more than 19% from the previous week, reaching its highest level since April of 2009. The seasonally adjusted purchase index rose about 13% from a week earlier — reaching its highest level in more than six months.

“Mortgage application volume increased sharply last week,” said Michael Fratantoni, MBA’s vice president of research and economics. “The increase was accentuated due to the comparison to the week including Memorial Day, but the level of refinance and total market activity is the highest since the spring of 2009.”

He attributed the surge, in part, to increased refinancing volume as borrowers locked in at rates well below 4%.

“HARP volume has been steady in recent weeks at about 28% of refinance applications,” he added, referriing to the government’s Home Affordable Refinance Program.

The refinance share of mortgage activity grew to 79% of total applications from 78% the previous week.

The average loan size of a home purchased in the U.S. hit $243,733 in May, up from $238,135 in April. The average loan size on a refinancing grew from $219,664 in April to $226,576 in May.

The average interest rate on a 30-year, fixed-rate mortgage with a jumbo loan balance declined from 4.13% to 4.12%, while the average FRM backed by the Federal Housing Administrationincreased from 3.7% to 3.71%.

The average interest rate for a 15-year FRM increased from 3.2% to 3.23%, while the average contract rate for 5/1 adjustable-rate mortgages remained unchanged at 2.78%.

FHFA: Q1 2012 HARP Refinances Double from Q4 2011

The number of loans refinanced through HARP in the first quarter of 2012 was nearly double the number of refinances in the fourth quarter of 2011, according to the Federal Housing Finance Agency’s (FHFA) March 2012 Refinance Report released Friday.

The report showed that 180,185 loans were refinanced throughHARP during the year’s first quarter, nearly twice the 93,190 refinances in the previous quarter. The month of March alone saw 79,470 loans refinanced with HARP, and nearly one in seven loan refinances in the quarter were done through program.

The FHFA attributed most of this increase to the launch ofHARP 2.0, an enhanced version of the program that eliminated loan-to-value (LTV) ceilings for borrowers who refinance into fixed-rate loans and lowered or eliminated fees for certain borrowers.

Before the program was changed, fixed-rate mortgages had aLTV ceiling of 125 percent. More than 4,400 underwater loans with LTVs greater than 125 percent were refinanced in the first quarter of 2012.

Other factors contributed to the increase in HARP refinances. Numbers shot up in the first few months of the year with news that mortgage rates were falling to historically low levels. February marked a new low record for mortgage rates and was the start of a sharp spike in refinance activity. As the year’s second quarter goes on, mortgage rates continue to fall.

More than 1.2 million loans have been refinanced throughHARP since the program began in 2009. Only loans that are guaranteed by Fannie Mae or Freddie Mac are eligible to participate in HARP. The full refinance report can be found at this link.

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